StabiLux sees colorful future in cell analysis technology

StabiLux was founded in 2014 by Yoke Khin Yap, a physics professor at Michigan Technological University.

StabiLux Biosciences Inc. was just what Steve Tokarz was looking for when he began working with MichiganTechnological University in Houghton last summer — a promising technology startup whose founder was willing to work with an experienced executive to accelerate commercialization.

StabiLux was founded in 2014 by Yoke Khin Yap, a physics professor at MTU whose group has developed reagents it thinks will be of value to researchers using machines called cytometers to do cell analysis.

StabiLux's reagents cause targeted cells — cancer cells, for example — to glow brightly, making them easier to detect and quantify than traditional reagents. "When you are screening for cancer cells, there are so few in the blood that they are hard to detect," said Yap.

Or, at least that's the plan.

It's up to Tokarz now to help turn the plan into a business.

Tokarz is president and CEO of SMKR LLC, an Ann Arbor-based consulting firm that helps startups get to market. He has helped several University of Michigan startups and has formal relationships with Western Michigan University and Michigan Tech to serve as an entrepreneur-in-residence for their spinoffs as opportunities come along.

Prior to founding SMKR in 2015, Tokarz spent 25 years at Taylor-based Masco Corp., where he was senior director of product development and engineering. In 2009, he founded Livonia-based BDT LightSource, which imported and manufactured energy-efficient lighting for businesses, which merged with American Green Technology in 2012 and was sold to Ushio America in 2016.

The entrepreneur-in-residence program is part of the Tech Transfer Talent Network, a program launched in 2011 by the Michigan Economic Development Corp. to help universities pay for experienced business executives to commercialize their technologies.

"I looked at a lot of opportunities at Tech and met with Yap in June and then in August. He had really good technology, with a really good market, but he needed help getting over the hump," said Tokarz.

"Yoke is a sharp guy. This is foundational technology, and he has it locked up. But the reality is, you can't be an effective CEO and a faculty member at the same time," said Tokarz. "Yoke was really receptive to what's best for the company, that he can't do it all, which can be hard when you've been working on a technology for years."

Yap, a native of Malaysia who got his Ph.D. from Osaka University in Japan and joined MTU in 2002, had learned the hard way how difficult it is to run a business and continue to carry a full teaching workload.

His first spinoff from MTU was called Nano Innovations LLC, which was founded in 2011 with an NSF grant of $245,000 to commercialize boron nitride nanotubes, which have been called "the divas of the nanoworld." They have alluring properties, such as being perfect insulators and being able to withstand heat well above 1,100 degrees Celsius, but are notoriously hard to work with.

Nano Innovations is still in existence, but in name only. Yap said he might revive it as a going concern at some point.

"Like a lot of professors, I didn't spend a lot of time on business development. As a faculty member here, I didn't have enough time. I had to do my job here, first. It was a lesson learned," said Yap, who remains as StabiLux's president and chief technology officer.

In July 2015, StabiLux was awarded an NSF Phase 1 Small Business Technology Transfer grant of $241,000, which runs through the end of this year. It will apply for a Phase 2 grant of $750,000 late this year or early next. In all, the company has received about $560,000 in a variety of grants. It has one employee, not counting Tokarz or Yap, one of his former post-docs named Nazmiye Yapici.

In the announcement of the award, the NSF said the funding was to help the company develop new fluorophores, which are chemical compounds that emit light when excited by a laser, and that offer a wider range of colors and are 250-1,000 times brighter than existing fluorophores.

Yap declined to say whether there are exotic nanoscale materials in his fluorophores, but said they currently are six times brighter than reagents currently on the market. "I believe our products can be improved to at least 200 times brighter," he said.

In a presentation to would-be investors at last May's Michigan Growth Capital Symposium in Ypsilanti, Tokarz said the company would begin sales next year, with revenue projections of $400,000 in 2017, $2.3 million in 2018 and $18.3 million in 2020. The plan is to license the technology to existing companies, like Beckman Coulter Inc. and Becton Dickinson & Co.

Because its products will be sold to the research community, it does not need approval from the U.S. Food and Drug Administration.

Tokarz hopes to close on a seed round of $600,000 by the end of this year.

"This makes cell analysis more accurate and more sensitive," said Fredrick Molnar, vice president of entrepreneurship at the MEDC. Before joining the MEDC in 2014, he had spent more than 25 years in a variety of jobs involving flow cytometry, including being director of flow cytometry operations in North America for Beckman Coulter.

Molnar said the global market for flow cytometry has been growing at 10-12 percent a year and is expected to be at $5 billion by 2021.

"It's a healthy market, and 60 percent of it is reagents, and StabiLux is solely in the reagent space. Their potential is significant," he said.

Molnar connected StabiLux with David Adams, who runs the flow cytometry lab at the Biomedical Research Core Facilities in the Office of Research at the University ofMichigan.

His lab began evaluating StabiLux's reagents this fall. "If Dave Adams says it works, it works," said Molnar.

Molnar said StabiLux is a good example of the research being done at Michigan Tech, usually under the radar screen.

"People think, 'The U.P.? What's going on up there?' It's really encouraging to see a small community like Houghton taking advantage of what it has. The (Michigan Tech Enterprise Corporation) SmartZone there and Michigan Tech do such a great job.

"It's a community of — what, 13,000? And they're really kicking butt."